Even if you’ve already bought a house, navigating the house-buying process can seem like a never-ending maze of paperwork and administration. From finding the right house to collecting the keys to your new home, preparation is key.
We give you the low down on how best to get yourself ready for finding and buying a house
It takes a great many steps to buy a house or flat. Even if you’ve bought a home before, you’ll probably need a reminder of what’s involved, and in what order. And if you’re a first-time buyer, you’ll want a step-by-step walkthrough of the house-buying process before you start.
Moving home isn’t something people do very often, and no two property purchases are ever quite the same. However experienced you might be, this succinct guide to home-buying is great to keep with you.
Home buying timeline
Here’s a quick breakdown of all the steps to buying a home, along with roughly how long each stage takes.
How long (approx.)
Assuming you already have your deposit saved up, you can get a mortgage in principle in 24 hours.
Finding a property and having an offer accepted
Several weeks if you’re lucky; several months if not
Working towards exchange of contracts
One to three months
Exchange to completion
Contracts are usually exchanged around two weeks before completion, but this period may be longer or shorter.
About two weeks to fulfil other obligations e.g. stamp duty.
2 to 3 months minimum – if all goes well!
Buying a home in Scotland
The Scottish process of homebuying is different from that in England and Wales. In Scotland the role of the estate agent is often handled by the solicitor, and certain other parts of the process are also streamlined (e.g. surveys are generally the seller’s responsibility, as part of the Scottish Home Report). There is also a different tax (Land and Building Transaction Tax) instead of stamp duty.
Read on to find out more about all the stages of buying a home in England, Wales or Northern Ireland.
1. Preparing to buy a home
Before you can start the process of buying a home, you of course need to know how you’ll pay for it. If you’re a first-time buyer, you’ll need to save up a deposit. If you already own a home, you’ll probably need to sell it in order to afford your next one. How long this takes can vary considerably.
We’ll assume you’ve got these steps in hand and move straight to the process of house-hunting.
Work out how much you can afford
You need to know the maximum price of property you can afford. This depends on the amount you’ll be allowed to borrow (which is based on your income), and on the size of your deposit. Our Mortgage Calculator can help you estimate this.
Get a mortgage in principle
Approach a lender for a mortgage in principle (MIP). This is an official estimate from a lender of how much you can afford to borrow on a mortgage. Even at this early stage it’s worth going through a mortgage broker in order to obtain the best available offer.
A mortgage in principle isn’t binding, but estate agents and sellers take them seriously. Therefore any offer you make based on your MIP will be seen as a realistic offer. Offers without an MIP (especially from first time buyers) may be taken with a pinch of salt.
Choose a conveyancer
When you come to buy your home, you’ll need a licenced conveyancer (who is usually a solicitor) to handle the legal side of things. You’ll need to hire (‘instruct’) your solicitor as soon as your offer on a property is accepted, so it’s a good idea to have a few options lined up in advance, so that you’re ready to roll.
It’s important to have a conveyancer who is listed on your lender’s panel. Mortgage lenders have a panel of conveyancers that they are prepared to work with, and only a few solicitor firms are on all of these panels. If you know which lender you’ll use, line up a conveyancer who is on their panel. If you don’t yet know, line up a choice of conveyancers who are on different lenders’ panels. You don’t want to find out halfway through the process that your solicitor can’t work with your lender! (This does happen.)
2. Find a home you like
House-hunting (or flat hunting) is the most fun part of the process, though it may also be the most time-consuming and frustrating. You can expect to view lots of homes that disappoint you, and lots that you fall in love with, only to lose out to another buyer. Patience is the key here.
Location, location, location
You may already have some idea of where you want to live, but if you don’t, it’s worth thinking about. Often, you’ll be paying for the location of the property as much as for the property itself, so consider what area benefits are important to you.
If you have children, is the property in the catchment area for a good local school? Will your children have a better or worse chance at getting into the school of their choice depending on the location of your new house? If you don’t drive, you’ll want to be close to local transport connections – these areas are usually high in demand, so you might have to pay more for a property in this area.
There are lots of factors that you will need to consider about your area before going through with a property purchase, so have a look at our Guide to Home Hunting for more things to consider.
Arrange a viewing
In areas with lots of demand for housing, even getting a viewing for a property can be tricky. If possible, you should always look to arrange a viewing in person, meaning that you will be able to see the property in its current shape while also asking questions about the history of the property, its foundations and anything else that concerns you.
Whether you’re conducting your property search through an agent or on your own, always speak to the other party to arrange a viewing time.
We’ve already put together a guide on how to avoid a money pit property, so consult that guide for a list of concerns to watch out for.
As a general rule though, damp and subsidence are the two key issues you should be aware of while doing a viewing, as they often indicate expensive structural work needs to be done.
If the house is older, any kind of structural work or renovations may end up incurring more work and more costs.
3. Make an offer
Once you’ve found the home you want, it’s time to talk about the price. You should make your offer through the estate agent, never directly to the seller (except in the rare cases of sellers marketing their home themselves). The ideal offer is the lowest price that will secure that home for you.
You can expect a certain amount of haggling to happen, so your first offer should be lower than you can afford. If the seller declines, you can then come back with a higher figure, and hopefully the two of you will eventually meet in the middle.
Remember that other buyers will also be bidding, so you’ll need to find a way to compete – either by offering more money, or by being in a better position to move quickly. Use our Tips for making an offer on a home.
If your offer is accepted
If your offer is accepted, don’t celebrate too hard just yet. Even if the seller agrees to take the property off the market, in practice this doesn’t mean very much, and you can still be outbid (or ‘gazumped’) at any point up to the exchange of contracts. The only real defence against gazumping is to get things moving along as fast as possible, by having your solicitor and mortgage broker primed and ready to go.
Calculate your stamp duty
It’s sensible at this point to work out how much stamp duty land tax (SDLT) you’ll need to pay on the property, to make sure you have the cash available (you’ll need to pay it without two weeks of completion). If you’re a first-time buyer your stamp duty bill will be reduced or even zero if the property sells for under £500,000. If it’s more expensive, or you’re not a first-time buyer, you’ll pay the usual rate. Find out how much stamp duty is.
4. Get your mortgage
Now you need a formal mortgage offer to confirm that you really can afford the property. You can go directly through a lender, but using a mortgage broker will maximise your chances of being accepted first time, and also gives you access to a greater choice of deals. A mortgage broker will also walk you through the whole process and explain anything you’re not sure about.
How long does a mortgage application take?
A mortgage application usually takes at least three weeks, and can sometimes take double that. The process should be quicker if you already have a mortgage in principle (see above) and use a mortgage broker. There are several factors that can harm your mortgage application without you realising, so you should act to minimise these in advance. Our interactive Mortgage Checklist can give you lots of ideas for improving your chances.
Your lender values the property
As part of your mortgage application, your lender will inspect the property to make sure a) that it really exists and b) that it is worth approximately what you are paying for it. This is sometimes called a ‘valuation survey’, but you should not confuse it with a property survey (which you must arrange yourself). Valuation surveys don’t identify any possible problems with the property.
If your mortgage application is approved
When you receive formal confirmation of your mortgage offer, check the documents carefully to make sure all the details are correct and as expected. Your mortgage broker can go over these with you to make sure.
5. Instruct your conveyancer
At the same time as you apply for your mortgage, you should instruct your solicitor to begin the conveyancing process. If you are also selling a property, it makes sense to have the same solicitor handle both transactions – though it’s not compulsory. As mentioned above, make sure your conveyancer is one that is on your lender’s panel.
What your conveyancing solicitor will do
Your conveyancing solicitor will ensure that the purchase of the property is fully legal, so that when it is transferred into your name no-one can challenge your ownership of it. They will also ensure that you sign all necessary documents, and will handle all the money transfers required for the purchase itself.
They will also conduct ‘property searches’. These are to make sure that you know exactly what you are buying, and the conditions of ownership (such as whether the property is freehold or leasehold, where your boundaries are, and any other obligations).
How much does a conveyancer cost?
This shows typical conveyancing costs (including VAT) in the UK, based on a property worth £350,000.
Grand total (if buying and selling)
Conveyancing fees may be fixed, or may depend on the value of the property, so ask your solicitor how they calculate their fee.
6. Arrange a survey
Unless your property is a new build (and sometimes even then), you will need a surveyor to check it for problems. There are four different types of survey, which go into various degrees of depth. Don’t skimp on the survey, or take anyone else’s word for it that the house is problem-free. The cost of a survey is insignificant compared to the potential cost of sorting out structural issues.
Renegotiate price if necessary
If your survey does turn up any significant issues that could be costly to fix, now is a good opportunity to renegotiate the asking price. You may be able to get a few thousand pounds knocked off the price, and should at least recover the cost of the survey itself (unless it found no issues).
7. Take out necessary insurance
Buildings insurance is a policy that pays out if your home is destroyed (e.g. by fire). Your lender will insist that you have it, but you can buy it from a different provider if you wish. Ensure that your cover begins on the day you exchange contracts.
Life insurance is not compulsory, but is usually essential anyway. It means that your mortgage will be paid off in full should one of the mortgage holders die, so your family can stay in their home.
Learn more: Do I need mortgage life insurance?
8. Agree a completion date
Your completion date is the day on which ownership of the property transfers to you, and (usually) you’ll move in. It is, in short, the Big Day.
You and the seller will need to agree this date in advance. This can be quite tricky to arrange, particularly if you are in a chain. Every buyer/seller in the chain will have to complete on the same day, so you are trying to coordinate a lot of people’s diaries. Usually people will do their best to be flexible, as this should be the most important thing in their lives right now. However, complications can arise (e.g. births, deaths, holidays, accidents). This is one of the reasons why shorter chains are preferable.
9. Transfer your exchange deposit money to the conveyancer
When contracts are exchanged (see step 10) the buyer must make a deposit of (usually) 10 per cent of the total property price. Note that this money is your exchange deposit. It is NOT the same as the mortgage deposit, which may vary in size – though your exchange deposit usually forms part of your mortgage deposit.
You will need to use a CHAPS payment to get the money to your solicitor. Your bank will charge a small amount for this.
What if I’m selling my current home? Do I still need to find an exchange deposit?
If you are selling a property as well as buying, you usually won’t need to find the cash for an exchange deposit. The money for the exchange deposit will come from your buyer (or from whoever in your property chain is the first-time buyer!). One issue that may arise here is if your buyer’s exchange deposit isn’t enough to cover 10 per cent of the property you’re buying. In this case you might need to find the extra cash.
What if my mortgage deposit is less than 10 per cent?
Another issue that can arise is if you’re buying with a very high LTV ratio and your mortgage deposit is less than 10 per cent. You may still have to find enough cash to cover the 10 per cent exchange deposit, unless you can agree a lower deposit with your seller. If they still insist on 10 per cent, you may be able to take out a short-term loan.
10. Sign and exchange contracts
You will sign and exchange contracts with your seller shortly before your agreed completion date. Most people exchange around a week before, sometimes two. It is possible to exchange and complete on the same day, but very risky – so save it for absolute emergencies.
Your solicitor will give you the contract to sign, and then you can exchange. At this point your solicitor will transfer your exchange deposit money to the seller’s solicitor.
This is the point of (almost) no return. Neither the buyer nor seller can now pull out of the sale without severe consequences. If you (the buyer) back out now, you lose your exchange deposit money. If the seller backs out, they are liable for the costs you have incurred. In practice, it’s extremely rare for this to happen.
Make sure you receive a completion statement
Once you’ve exchanged contracts, your solicitor will give you a final document with details of the money that you’ll need to pay either on or before completion day. This will include your solicitor’s fee.
Sign the transfer deed
You may also need to sign the transfer deed, which confirms that the property is transferring to you.
11. What happens on completion?
A few days before the completion date, your solicitor will contact your mortgage lender to get the money released. Your solicitor then sends this money to the seller’s solicitor, along with the remainder of your mortgage deposit (they should already have your exchange deposit). In return, your solicitor is given the title deeds to the property, along with proof that the seller’s mortgage has been paid off.
The property is now legally yours.
Paying stamp duty
If you need to pay stamp duty, you must settle this bill within 14 days of completion (again, paying via your solicitor). Usually your solicitor will request this money from you before completion day.
One of the final steps is to register your ownership of the property with the Land Registry. Again your solicitor takes care of this, and the fee is around £200 to £300. Once this is done, the title deeds of the property are transferred into your name, and forwarded to your mortgage lender (or to you, if you own the property without a mortgage).
12. Moving day
There is only one thing left to do: move in! You should have been preparing for this day for weeks if not months, so make sure you have it planned down to the last detail.
It’s worth being aware of what happens on moving day when there are several transactions in the chain. Essentially, completions have to happen in succession. The first-time buyer’s purchase happens first, and then the money from that purchase moves up the chain to fund the next purchase, and so on until all the purchases are complete. If you’re the last in the chain (i.e. at the top) this can result in a longer wait, so you may not complete and receive your keys until late in the day. Bear this in mind when instructing your removal company, and when making your own practical arrangements for the big day.
Arrange a removal company
If you’re bringing all your furniture with you, you’ll need a removal company. If possible, you should start researching removal companies as early as possible, particularly if you’re moving during the summer months.
Removal companies can be booked up weeks in advance, so for the best pricing and availability, start researching as soon as you have a rough date for your move.
You should also think about how much you want to spend transferring your items. Businesses will offer you quotes depending on how any items you want to bring, so if you’re looking to make the move on a budget, you might want to get help from family and friends.
As always though, shop around for the best prices and ensure you get value for your money.
Moving day itself can be stressful – but look on the bright side: all the other stress is now behind you, and you have your new home!